Poverty and Social Policy in Latin America

Most indicators of human development in Latin America improved considerably until the early 1980s. Unfortunately, the debt crisis which hit most countries in the region during the 1980s badly dented the social record. Not only did it increase the number of people living in poverty but it led to a profound change in the nature of the development model. Neo-liberal economic thought and the lessons of the debt crisis convinced one Latin American state after another that it should follow a different development path.
Economic stabilization and structural adjustment had a profound effect on poverty in the region. Most families became poorer, particularly those living in the cities. Structural adjustment and the new economic model also modified the role of the state. Increasingly, Latin American governments stopped giving general subsidies and introduced a strategy of targeting subsidies at the poor. In places, the new strategy will no doubt provide an adequate safety net, but in others it will fail to provide sufficient help for the poor. All we can predict is that poverty will long remain regrettably common in most parts of Latin America. In places, economic growth will undoutedly reduce poverty but it is not at all easy to predict where it will be reduced. In this respect Latin America is very much like the rest of the world. Globalization has opened up local economies to international competition and offered them the prospect of selling local goods to foreign markets. How many Latin American economies will benefit from the new situation will determine how the poor will fare. Unfortunately, the state's ability to deal with any subsequent poverty has been greatly reduced. That, too, is part and parcel of the process of globalization.     

Product Line Extensions and Technology Licensing with a Strategic Supplier

In many industries, original equipment manufacturers (OEMs) must obtain critical components from a few powerful suppliers. To the extent that the OEMs are also concentrated, the interactions between the suppliers of critical components and the OEMs are strategic, and have implications for how an incumbent OEM chooses its product line and interacts with potential rivals. We demonstrate that, by adding a low‐end product line extension, an OEM can induce a strategic supplier to offer more favorable pricing. Moreover, depending upon the cost structure and relative performance of the product line extension, the OEM may benefit even more from the low‐end line extension if it is produced by a rival instead of by itself, even if it cannot obtain any licensing income from it. Among other things, we show that this can result in a decentralized OEM accommodating competition from rivals producing product line extensions that would not be developed in a vertically integrated supply chain. In an extension, we re‐examine the common assumption that the supplier unilaterally dictates a single wholesale price that is available to all downstream buyers. We demonstrate that, by committing to offer a “lowest available” wholesale price to all downstream buyers, a supplier can encourage an incumbent OEM to share its technology (or otherwise accommodate the entry of a rival) so that the supplier, the incumbent OEM, and the rival are all better off.     

A REGRESSION ESTIMATION METHOD FOR COLLINEAR PREDICTORS

This paper addresses the important and pervasive condition of multicollinear predictors in regression analysis. The paper discusses the rudiments of a recently proposed “improved estimation” procedure (ridge regression analysis) to be used when the predictors are not orthogonal and compares the empirical performance of the ridge technique in estimating some known coefficients with the traditional estimation methods of least squares and stepwise regression.     

Estimation of conditional cumulative incidence functions under generalized semiparametric regression models with missing covariates,with application to analysis of biomarker correlates in vaccine trials

This article presents generalized semiparametric regression models for conditional cumulative incidence functions with competing risks data when covariates are missing by sampling design or happenstance. A doubly robust augmented inverse probability weighted (AIPW) complete-case approach to estimation and inference is investigated. This approach modifies IPW complete-case estimating equations by exploiting the key features in the relationship between the missing covariates and the phase-one data to improve efficiency. An iterative numerical procedure is derived to solve the nonlinear estimating equations. The asymptotic properties of the proposed estimators are established. A simulation study examining the finite-sample performances of the proposed estimators shows that the AIPW estimators are more efficient than the IPW estimators. The developed method is applied to the RV144 HIV-1 vaccine efficacy trial to investigate vaccine-induced IgG binding antibodies to HIV-1 as correlates of acquisition of HIV-1 infection while taking account of whether the HIV-1 sequences are near or far from the HIV-1 sequences represented in the vaccine construct.     

CREDIT CONSTRAINTS AND THE CYCLICALITY OF R&D INVESTMENT: EVIDENCE FROM FRANCE

We use a French firm‐level data set containing 13,000 firms over the period 1994–2004 to analyze the relationship between credit constraints and firms’ R&D behavior over the business cycle. Our main results can be summarized as follows: (i) R&D investment is countercyclical without credit constraints, but it becomes procyclical as firms face tighter credit constraints; (ii) this result is only observed for firms in sectors that depend more heavily upon external finance, or that are characterized by a low degree of asset tangibility; (iii) in more credit‐constrained firms, R&D investment plummets during recessions but does not increase proportionally during upturns.     

A New Multiperiod Multiple Traveling Salesman Problem with Heuristic and Application to a Scheduling Problem

A new multiperiod variation of the M-traveling salesman problem is introduced. The problem arises in efficient scheduling of optimal interviews among tour brokers and vendors at conventions of the tourism and travel industry. In classical traveling salesman problem vocabulary, a salesman is a tour broker at the convention and a city is a vendor's booth. In this problem, more than one salesman may be required to visit a city, but at most one salesman per time period can visit each city. The heuristic solution method presented is polynomial and is guaranteed to produce a nonconflicting set of salesmen's tours. The results of an implementation of the method for a recent convention are also reported.     

A MULTIATTRIBUTE DECISION-MAKING APPROACH TO THE SELECTION OF AN AUXILIARY DEVICE FOR ICEBREAKERS*

This paper describes the use of multiattribute decision making by the U.S. Coast Guard when choosing the most appropriate auxiliary device to use on an icebreaker. Five different missions of icebreakers are defined, and the objectives and attributes that describe the effectiveness of each auxiliary device in accomplishing these missions are established. For each geographical area of interest, the missions are weighted using the analytical hierarchy process. Also, group utilities are developed for attribute vectors in order to incorporate the judgments of different icebreaker operators.